Condivergence: Are we back in the 1930s?

This article first appeared in Forum, The Edge Malaysia Weekly, on December 6, 2021 - December 12, 2021.
Condivergence: Are we back in the 1930s?
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Coming back from the first trip overseas after nearly two years in lockdown, travel seems almost strange. On top of stringent security arrangements, health checks, masks and standard operating procedures have added time and stress — from airport clearance to hotel and restaurant bookings. Travel in a time of pandemic is not exactly fun.

I visited Spain, France and the Netherlands where there were clear signs that their economies are moving back into recovery gear, with consumers tired of lockdowns. Shops, cinemas and even street protests are back in action. Restaurants are full and it was a delight to taste different food for a change. It was also good to see old friends and attend physical conferences again, just to exchange news in person instead of virtually.

Politics seemed the same everywhere. No trust in any politician and politics. Nor would any election help in changing the status quo. Every country seemed to be in the grip of coalitions where small parties, some with extreme views, seem to push policies all over the place because no one party had majority mandates. Each government was surviving with small margins. Even French President Emmanuel Macron’s re-election could be in doubt next year.

Europe seemed more inward looking than before, with everyone more concerned with domestic issues, rather than European and, even less so, issues outside Europe. There were some concerns about the rise of China, but not the extreme fears expressed in the American media. Within the last few days, the emergence of the Omicron variant of the coronavirus cast a shadow on moods everywhere. We left Amsterdam on the eve of another three-week lockdown. It was an eerie feeling, like being in the movie Casablanca, when everyone was on edge trying to escape the coming war.

In a sense, the current global situation has a mood like the 1930s, when the Roaring Twenties ended and the world entered into a period of growing uncertainties, confusing politics, rising right-wing extremism and looming war. The rich never had it so good, and the poor faced unemployment and hunger.

My European friends were all puzzled by the contrast between the bubbly stock markets and the gloom and doom of everyday life. People were actually queuing outside the glitzy brand name shops again for their Louis Vuitton and other luxury brands. At the same time, we saw poor people sleeping in the cold city streets, with graffiti all over the walls. The stark contrasts were visible. European governments are running fiscal deficits and printing money just to keep the economy and society together.

Many older persons feel in their bones that another financial crash is coming. Yet the key central bankers still think that inflation is transient. Something does not quite add up.

The pandemic threw up two crucial questions: First, is the current economic model based on monetary printing sustainable? Second, and perhaps more relevant, is the current business-as-usual political model still viable?

Both questions are tied up with each other. The mainstream economic view argues that monetary creation is sustainable if the fiscal and reform efforts pay off and if inflation does not get out of control. So far, supply chain bottlenecks and job vacancies suggest that inflation will persist, but may level off at a higher plane. It will be difficult to eradicate growing inequality. Climate warming and natural disasters plus human policy errors compound the mass misery.

The political game is the more intractable issue. After all, politics determines who will rule the country. In an electoral democracy, each citizen gets to vote periodically to determine whether there should be change. But electioneering costs money, and therefore politics may no longer represent the poor or underprivileged because those who are able to raise political funding from businesses win from superior media, a lot of campaigning and “freebies” during elections. In the past, the people might tolerate a small amount of corruption, but when money politics becomes venal, the system gets entrenched and cannot change.

There are no permanent friends or enemies, only permanent interests of money politics.  Those who can print the money rule.

All such cynical views belie the real governance issue of the need to deliver competent governance. Essentially, the people want competent (and least corrupt) government that delivers the long-run interests of the people and nation. That is the true meaning of “government of the people, by the people, for the people”. Electoral democracy has a short-termism effect, since the voting cycle of four to five years ensures that political candidates only think in short terms. Parliamentarians and governments have only a short-term incentive to work on just winning the next election. But doing what is popular in the short term could be very damaging for the long term.

When a government has been in power for too long, the opposition is less experienced, and by the time they figure out how things work, they may be out by the next election. The result is that long-term issues seldom get fixed properly.

The essence of good governance is good feedback mechanisms so that the government (including the civil service) gets constant and accurate feedback on what needs to be fixed and how to deal with long-term structural issues. Keeping the status quo is not viable if the external environment has changed dramatically, such as the rapid shift to digital technology. Climate change demands radical changes in business operations. Geopolitical rivalry hurts the weak. Thus, we must have a good long-term plan on how to prepare our citizens, including both young and old, for the transition into an era of grave uncertainty.

Under such circumstances, what can we do to assess what the people want on the big issues of our times?

Elections essentially vote on individuals or parties so that they are delegated to decide on the tough issues. Some countries use referendums to decide on important issues, but these are expensive to run and simple questions may turn out to have long-term unfavourable answers, such as the UK referendum on Brexit. On what was thought to be a simple issue, the referendum took Britain out of the European Union with grave consequences — economically, politically and strategically.

Another possible route is a royal commission, in which credible and authoritative people are appointed to have public hearings and then make recommendations on what to do. What royal commissions cannot do, however, is to make decisions on very broad directions on what the people really want.

In times of great change and stress, including the trauma from the pandemic, it is important that we have a consultative mechanism or process to begin to hear what people at the grassroots want, including ideas on how to fix the system. This is not a challenge to existing authority or the powers-that-be, because the feedback would help the incumbent government respond better to the needs of the people.

The existing system is in trouble because the incumbent elites are not hearing or listening to good ideas from the mass base. Very often, those who suffer from the system have a better sense of what needs to be done and also good ideas on solutions.

A wise Dutchman told me on this trip that there is a difference between discussion and dialogue. Discussions often are between persons who talk to each other but really are not listening. Dialogues are between those who really are open to each other’s views, good or bad, and who listen closely to what the other side wants to convey.

The native or indigenous peoples in Americas and Australia have a tradition called the talking stick. When people meet, the person who holds the talking stick has the right to be heard, so that everyone has a chance to voice their views. Realistically, ancient tribes such as the indigenous people have wars and fight with each other. But they resolve these conflicts through regular pow-wows or talks, in which the rituals, such as smoking peace-pipes, enable opponents or competitors to exchange views and slowly arrive at compromises or ways forward.

The time has come for a Malaysian National Consultative arrangement, where we begin the process of a people’s dialogue on what the future holds for our children and our nation. Too many grievances exist in which no race, religion or community is feeling totally comfortable. Time for us to air these in a consultative process and find a pathway out of the current gridlock. We should move out of the criticise-each-other mode into a constructive dialogue in which we explore avenues and options where we can work together in practical and transparent ways to stop the erosion in our competitive position, so that we will have better jobs and incomes for our families, without fear or favour of all parties.

The history of the 1930s showed that by not talking with each other, another world war and various civil wars that no one wanted broke out. None of us can claim to be smarter than all of us. Whilst others quarrel, those who can make peace and work together have a brighter future together. In this era of grave uncertainty, we cannot ask for more.


Tan Sri Andrew Sheng writes on global issues from an Asian perspective

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